Brashares, William C., counsel, National Tool, Die, & Precision Machining Association, Washington, D.C... Bratton, Robert E., Lighthouse Point, Fla.--- Response to questions by subcommittee counsel. Bredenbeck, Richard, president, Efficient Industries Corp., Cleve- Carr, Richard A., Director of Production Services, Office of the Assist- ant Secretary of Defense (Installations and Logistics) ---- Cleveland, Gordon, president, Craig Tools, Inc., Los Angeles, Calif. Feikens, John, counsel, Republic Die & Tool Co., Detroit, Mich.......... Greenbury, Donald B., president, Arrowsmith Tool & Die, Inc., Hardman, William E., executive vice president, National Tool, Die & Precision Machining Association, Washington, D.C., accompanied by William C. Brashares, counsel.- Harriss, Robert E., Chief, Data Systems Branch, Defense Industrial 20, 36 Lasco, John C., president, Republic Die & Tool Co., Detroit, Mich.. Lewis, Harland G., Assistant Director, Programs and Resources Divi- Martin, Dr. Joseph, professor, College of Engineering, director, Indus- trial Development Division, University of Michigan. McGinnis, Paul, president, Sauter Machine Tool Manufacturing, Sanderson, Albert F., Deputy Chief, Materials Policy Division, Testimony of-Continued Smith, Dr. Donald N., assistant director, Industrial Development Stanwix-Hay, Maj. Gen. Allen T., Deputy Assistant Secretary of Appendixes to statement. Sweeney, Robert R., Chief, Industrial Plant Equipment Branch, Headquarters, Defense Supply Agency. Page 173 178 196, 262 200 196 Tomlinson, Victor C., counsel, Chrysler Corp 121 Walker, H. T., president, Walker Die, Tool & Engineering Co., 53, 56 Zeidler, Oswald W., president, Zeidler Tool & Die Co., Detroit, Mich. Additional information: Colt Industries, Inc., Pratt & Whitney Division, letter to House Small 288 Detroit Tooling Association article, "Michigan Maintains Its Tool and Die Leadership". 158 DOD administrative remedies. 257 Ford Motor Co. letter to Hon. Neal Smith, July 10, 1969. 121 General Electric Credit Corp. letter to House Small Business Committee, September 18, 1969 288 General Motors Corp.: Answers to questions submitted by House Small Business Com- 162 Chevrolet interorganization letter, July 11, 1969....... 158 Cost analysis to determine optimum in-house capacity (chart). 153 144 Passenger car sheet metal die construction workloads (chart) U.S. manufacturing employees and skilled tool and die employees as a percent of U.S. manufacturing employees (chart) – Hollabaugh, Marcus A., letter to House Small Business Committee, September 22, 1969. 143 166 House Small Business Committee letter to Marcus A. Hollabaugh, 165 Kearney & Trecker Corp. letter to House Small Business Committee, 284 Tool lease agreement. 285 Laird, M. R., letter to Hon. L. Mendel Rivers, October 1, 1969– 300 208 Metalworking News article, "GM Spikes Talk of Big Tool Orders in 144 Office of Emergency Planning-Defense Mobilization orders_ 266 202 Steel Weekly, article, "Steel Features-Chrysler Builds Tomorrow's 129 Summary of renewal payments (table). 257 Appendix 1-Technological Change in Michigan's Tool and Die Industry, by Donald N. Smith. Appendix 2.-Make-or-Buy Decisions in Tooling for Mass Production, by "Creep," by Robert L. Dixon... app. 2, p. 29 PROBLEMS FACING THE TOOL AND DIE INDUSTRY TUESDAY, MAY 20, 1969 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON SPECIAL SMALL BUSINESS PROBLEMS OF THE SELECT COMMITTEE ON SMALL BUSINESS, Washington, D.C. The subcommittee met, pursuant to notice, at 10:15 a.m., in room 2359, Rayburn House Office Building, Hon. Neal Smith (chairman of the subcommittee) presiding. Present: Representatives Smith, Addabbo, Horton, and Conte. Also present: Gregg Potvin, general counsel; T. J. Oden, subcommittee counsel; Myrtle Ruth Foutch, clerk, and Fred M. Wertheimer, minority counsel. Mr. SMITH. The subcommittee will come to order. This is the Subcommittee on Special Small Business Problems. We are commencing hearings today on several problems presently facing the tool and die industry. This industry is very important to our economy and constitutes the foundation upon which almost all manufacturing capacity rests. The tool and die industry, as a supplier of basic production equipment, has been a very important factor in meeting the commercial needs of the country, and of course their skill and ingenuity are even more vital, as we become an increasingly technological society. It has been alleged that the tool and die industry is currently facing several major problems, and that one in particular could alter the composition of the industry as we have known it. The tool and die and automotive industries have continually and historically had a close working relationship. Recent developments, however, in expansion of the captive or inhouse potential by the automotive industry have caused many tool and die businessmen to fear that an end to this historically close relationship may be soon forthcoming, or that at least major adjustments may be expected. We hope that these hearings will answer several questions, including: (1) Whether a buildup of in-house facilities by the automotive industry signals a drastic change in their manner of acquiring their various tooling needs. (2) Whether the fear of an adverse effect by the small tool and die businessmen is justified. (3) If this change does take place, will it so weaken the independents as to reduce their ability to respond to other production needs, and therefore affect the national interest, and (4) Are any public policy questions involved that warrant further legislative interest either in the form of legislation or hearings. Questions have also been raised by the tool and die industry concerning certain procurement practices of the Department of Defense. These questions involve the practice of major prime contractors subcontracting tool, die, and precision machining, working among themselves rather than dealing with independently owned tool and die shops; the practice of leasing Government-owned machine tools to large contractors; and practices of the Department of Defense in the procurement of spare parts. As today's hearing begins, the subcommittee will receive testimony from representatives of the tool and die industry. At subsequent sessions, representatives from the automotive industry will testify as well as officials from the Department of Commerce and the Department of Defense. We appreciate the appearances of witnesses before this subcommittee. Today and tomorrow, representatives of the National Tool, Die & Precision Machining Association will testify and present various aspects of the problem, or their view of the problem currently facing the industry. I want to say at the outset of the hearing that we scheduled these hearings 6 weeks or 2 months ago, and there is no way to know that far in advance what the program will be in the Congress. This afternoon and tomorrow afternoon we have a very important supplemental appropriations bill, which affects practically every department of Government between now and the end of the fiscal year, and even their continuing resolutions for July and August, and we may have some difficulty. I wanted to explain now that you will hear bells ringing and we may have to leave and then come back, but we will do our best to accommodate the purposes of the hearings. I wanted you to know that we are going to have some problems this afternoon and tomorrow afternoon, but in the mornings I think we will be able to make good time. Mr. Horton? Mr. HORTON. Mr. Chairman, I want to thank you for calling these hearings, and also to express appreciation to you and to the other members of the subcommittee and of the committee for your concern for the problems of the small businessman, particularly in the tool and die industry. The hearings which our subcommittee begins today involve some very serious and difficult problems which are facing the tool and die industry, and I might say parenthetically that this industry is one with which I am very much concerned. We have a large number, probably one of the largest concentrations of tool and die shops in the country, in the Rochester area, and many of these people are my constituents. I have tried to work very closely with them, and worked with them particularly in connection with the hearings of this subcommittee which were held during the 89th Congress in 1966. This industry, which has played a very significant and valuable role in this Nation's economy for a great number of years, is also an industry which has been in the past and remains today one composed of thousands of independent small businesses. In this sense it shares a |